Startups Are Susceptible to ‘Happy Talk’

David Sacks: A lot of founders are susceptible to “happy talk.”  They only want to hear good news; they want to believe.

If I’m in a board meeting, trying to explain that things aren’t going that well, the founder will often demand an extraordinary amount of proof. But if I’m saying something positive, the burden of proof is very low.

Don’t wait until your back’s against the wall

In 2007 we got off to a really hot start with Geni, a family social network. Then Facebook expanded beyond colleges and it became clear to me that they would eat family social networking.

A lot of people on my team said families would never join Facebook, but the writing was on the wall. It wasn’t absolutely proven—that would take a few years—but I didn’t wait for it to happen. So we pivoted to corporate social networking with Yammer.

Founders should maintain a consistent burden of proof for good and bad news.